Financial Times
February 18, 2012
Greece plans to launch a debt swap next month for private bondholders as part of a second €130bn bail-out expected to be approved on Monday by eurozone finance ministers, a government official said on Saturday.
The official said the swap, which would cover €200bn of Greek sovereign debt, would take place between March 8 and March 11, only days before Athens is due to repay a €14.4bn bond maturing on March 20.
As a first step towards completing the deal, the Greek parliament is set to pass legislation next week on so-called collective action clauses, with the aim of forcing a minority of “holdout” investors to take losses of around 70 per cent on their holdings.
The debt swap would offer bondholders a cash sweetener of 10-15 per cent of their holdings, plus new 30-year bonds with a coupon of around 3.75 per cent, which could increase if Greece achieves higher than forecast growth rates
An Athens banker with knowledge of the swap negotiations said the size of the cash payment and the final interest rate would be set by eurozone officials ahead of Monday’s meeting of finance ministers.
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